Zeroing in on the economic impact of marijuana legalization
Enough with the doctors’ prescriptions and medicated gummy worms—how much money can California and its cities rake in if marijuana is legalized?
It’s a question political leaders and traditional media outlets are not just quietly wondering—they’re straight-up shouting it out loud on the heels of Colorado’s and Washington’s big free-weed moments.
Because frankly the payday’s looking pretty sweet. Washington’s Office of Financial Management estimated in August 2012 that legalization would generate more than $500 million in tax revenue annually just through the implementation of a pot tax. And that’s just special tax revenue alone, not total economic impact.
Bloomberg business news said that marijuana could eventually be upward of a $110 billion industry in the United States. That’s right: on par with the domestic beer market. Time magazine recently wrote that if California legalized it, marijuana would immediately become the state’s No. 1 cash crop, with more than $14 billion in annual sales alone.
There are other economic incentives in addition to tax revenues, such as jobs (a single dispensary employs dozens, including security, delivery, even graphic-design workers), state taxes, fees and more.
This is not to mention the savings that would result from ending the “war on weed.”
For instance, Harvard University economist Jeffrey Miron wrote in 2012 that the United States would pocket $7.7 billion each year if it didn’t have to enforce marijuana prohibition. His paper, which was published last summer, bore the supporting signatures of more than 300 economists, including three Nobel laureates.
Forbes magazine was even more ambitious with its prognostication, arguing that if the war on marijuana ended, America would save $41 billion from non-enforcement.
More savings abound, such as those that would result from moving dollars from the Mexican drug cartels to the American economy: The RAND Corporation estimated, for example, that legalized bud in California would suck away 4 percent of the cartels’ income.
A pot of gold, indeed.